Mortgage Product Tie In Charges - Early Release

Alan_Grossmith

My Wife and I currently have an interest only mortgage with Abbey with a monthly payment of £1231.22. The debt is split 50/50 over two products. The first ends September 2010 (with an ERC of £3447.69) and the second ends September 2012 (with an ERC of £4986.81). We are also in negative equity.

Although we have never missed a mortgage payment, due to my Wife's redundancy, unexpected childcare fees, my employer no longer offering regular overtime (which was included in our income when we applied for the mortgage) and huge outlays on our car, our unsecured debt ran up and now we are on a DMP (Debt Management Plan).

If Abbey's base rate were to remain the same, in September 2010 our mortgage payment will reduce by £263.37 per month, which would greatly help us clear our unsecured debts that we owe.

A family member said that the Government were telling major Lenders that they had to assist their borrowers who were in financial difficulties and suggested we write to Abbey to explain our circumstances and ask if they would release us now from our September 2010 ending product, as it would help us get ourselves out of debt and working towards being credit worthy again.

The two problems/concerns we have with this is firstly as we are up to date with our payments to Abbey they will not care about debt elsewhere and that we signed to go onto the products that have a set end date, and secondly, my Wife is concerned that if we make Abbey aware that we are on a DMP it might cause problems between ourselves and Abbey.

Can anyone offer or share any advice/suggestions or personal experiences that may help?

Many thanks

Alan

dunstonh

A family member said that the Government were telling major Lenders that they had to assist their borrowers who were in financial difficulties and suggested we write to Abbey to explain our circumstances and ask if they would release us now from our September 2010 ending product, as it would help us get ourselves out of debt and working towards being credit worthy again.

The banks have to do help people out but there is no evidence to suggest that anyone is being let out of an ERC from a mainstream lender. A few sub prime lenders have as an incentive to get rid of you but Abbey are not in that position.

Getting out of that charge is not the sort of help that the Govt was suggesting.